EL SALVADOR ~~:Jrrp - USDA Economics, Statistics and Market

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FOREWORD
This is the fifth in a group of reports on Central America's
agriculture and trade, issued by the U.S. Department of Agriculture.
The first four reports in the group are:
Guatemala - Its Agricultural PrQduction and Trade,
by Mary S. Coyner, Foreign Agricultural Service.
FAS-M No. 51. April 1959.
Central America as a Market and Competitor for
U. S. Agriculture, by Kathryn H. Wylie, Foreign
Agricultural Service. FAR No. 116. December 1959.
Agriculture and Trade of Nicaragua, by MaryS. Coyner,
Foreign Agricultural Service. FAS-M No. 87. June
1960.
Agriculture and Trade of Honduras, by MaryS. Coyner,
Regional Analysis Division, Economic Research Service. ERS-Foreign No. 33. May 1962.
The author gratefully acknowledges the cooperation of numerous officials in El Salvador and the assistanceof U. S. Agricultural
Attache, Mr. Alvin E. Gilbert.
Photographs used in this report are courtesy of the Pan
American Union.
CONTENTS
Summary and outlook..................................................
iii
Background factors.... . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .
1
Physical features.... . . .. . .. ... . . .. . ..... ...... ....... .. . . . ........
Climate...............................................................
Land use and tenure...............................................
Population ....................... e·•······· .. ··························
Transportation and marketing..................................
1
1
3
4
5
Agricultural development ............................. ······~···· ... .
7
Agricultural output ........... .................................... .
Production practices ............................................. .
Agricultural policies ............................................. .
Agrarian reform .......... ........................................ .
Agricultural credit ............. .................................. .
8
8
9
Production pattern ............. .
12
13
13
14
Export crops ......... .............................................. .
Food crops .......................................................... .
Livestock and products .......................................... .
18
20
Domestic consumption of food products ......................... .
22
Trade in agricultural products .................. ..
23
Trends in agricultural trade ..... ..................................... .
Trade policies .............................................................. .
23
28
Effect of economic inte~ation ................................. ............. .
28
June 1963
i1
SUMMARY AND OUTLOOK
Total agricultural production in El Salvador is keeping ahead of population growth, thanks to coffee and
cotton. However, if food production alone is considered, then the per capita output lags badly. The total
population is estimated at around 2.6 million and is increasing at a rate of over 3 percent annually. One of
El Salvador's most vital needs is for basic education for all of these people.
Daily per capita consumption of food is below minimum caloric nutritional standards. It has been estimated at 1,975 calories, which is about the same as in Nicaragua but considerably lower than in any other
Central American country. The diet is also deficient in protein and fat.
The heavy pressure of population shows no signs of diminishing. Aside from sections of the Pacific
. coastal area which could be further developed agriculturally through irrigation and drainage, the small size
of the country leaves little room for shifts in population or for expanding the area devoted to agriculture.
Much has been accomplished in increasing agricultural yields through better farming practices, but much
remains to be done. Soil conservation practices must be stressed continuously in order to slow down the
wearing away of the country's soil resources.
Current policy goals of the Government are aimed at eliminating two of the weak spots in the country's
agriculture: its dependence on coffee and its failure to produce enough of the basic foods.
Through research, methods are being sought to maintain current coffee production levels on less acre. age, thereby releasing marginal coffee lands for the production of other crops. Research might also turn up
new uses for coffee, which would help to reduce or control the surplus. The Institute Salvadoreno de Investigaciones del Cafe (Salvador Institute for Coffee Research) was set up to carry on experimental research
and further the development of the coffee industry.
Industrial expansion stimulated by development of the Central American Free Trade Area and the
Alliance for Progress could provide an additional source of national income and supplement the foreign exchange earnings of coffee. El Salvador has made marked progress toward industrialization. With sources of
raw materials close by in Central America, the country may be able to enhance its position as the industrial
leader in this area.
If more marginal coffee and cotton lands are turned back to food crop production, El Salvador may be
able at least to maintain present consumption levels without increasing food imports. The immediate outlook
is for continuing imports of basic foods. El Salvador is also importing larger quantities of wheat to supply
its milling industry. More attention is being given to livestock and the need for high quality breeding animals
is recognized.
El Salvador exports over $100 million worth of commodities, of which the greater part is agricultural.
The United States is still one of the best markets for these commodities, though its importance has been
declining. Imports also amount to about $100 million with agricultural products making up 15 percent of
the total.
The major competition with U.S. farm products among El Salvador's exports comes from cotton and
cotton linters. Exports of these products accounted for $21 million in 1961, an increase of 35 percent over
1960. A record crop is expected in the 1962-63 harvest.
El Salvador's big agricultural imports are dairy products, wheat and other grains including pulses, and
live animals. The United States supplies about one-third of all agricultural imports. Wheat imports increased
by almost $1.5 million in 1961 over imports in 1960. The United States supplied morethan 80percent ofthe
total. Increasing attention to the livestock and dairy industries will bring more demands for purebred- stock
for breeding purposes, and Salvadoran preference for U. S. animals has been demonstrated.
Industrialization will provide an expanding market for agricultural imports since many industries will
be processing raw farm products. It will also tend to improve purchasing power which may be reflected in
increasecl. imports of food from the temperate zones in which the United States may be expected to share.
iii
90
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ERS 1740-63(1) ECONOMIC RESEARCH SERVICE
EL SALVADOR--ITS AGRICULTURE AND TRADE
By Mary S. Coyner
Western Hemisphere Branch
Regional Analysis Division
BACKGROUND FACTORS
Agriculture is still the basis of El Salvador's economy in spite of the country's relatively
high degree of industrialization. Agriculture's contribution to the gross national product is about
35 percent of the total. More than 60 percent of the working population are employed in agriculture and around 90 percent of foreign exchange earnings comes from the export of agricultural products.
Physical Features
El Salvador is a small compact country of slightly more than 8,000 square miles in area,
with a maximum length of 160 miles and an average width of 60 miles. It is the smallest, most
densely populated, and most highly industrialized of the Central American countries. The two
mountain ranges which cross the country from west to east cradle a region of plateaus broken
by numerous river valleys. This plateau area is devoted to general farming, particularly of
crops for domestic consumption. At least three-fourths of the people live here and it is a most
intensively farmed area.
The range of mountains nearest the coast is marked by a series of volcanoes whose
eruptions through the years have built up the deep porous soils that produce El Salvador's
splendid coffee. The coastal areas are devoted to the production of cotton, sugarcane, and
coconuts.
Earthquakes are frequent and while most tremors are minor, occasionally serious damage
occurs.
The Lempa is the country's largest river. It rises in Guatemala, enters El Salvador in
the northwest, then turns east and finally south before it empties into the Pacific. It is the
source of El Salvador's irrigation water and much of its hydro-electric power. Many rivers
empty into the Lempa while others, short of length, rise in the coastal range and flow directly
into the Pacific.
There are a number of lakes in El Salvador, the largest of which are Lago de Guija,
located on the Guatemalan border; Lago de Coatepeque in the western part of the country;
and the Lago de Ilopango near San Salvador.
Climate
Although El Salvador is a tropical country, the heat is tempered by the plateaus and hills
that cover most of the country. Daytime temperatures generally are warm rather than tropically
hot, and the nights are cool.
Table 1.--El Salvador: Rainfall at selected stations
------------------------~--------------------------(incpes)
Years
of
record
Station
Metapan ...................... :
Santa Ana .................... :
Sonsonate .................... :
Acajutla ..................... :
San Andres ................... :
Santa Tecla .................. :
San Salvador ................. :
Cojutepeque .................. :
Zacatecoluca ................. :
Santa Cruz Porri11o .......... :
Usulutan ..................... :
San Miguel ................... :
Cutuco ....................... :
:Jan. :Feb. :Mar. : Apr.
1931-57 :
1912-57 :
1916-57 :
1914-57 :
1947-57:
1942-57 :
1912-57:
1927-57 :
1927-57:
1949-57:
1928-57 :
1927-57:
1927-57 :
.04
.08
.12
.o4
.43
.24
.24
.16
.08
.08
.04
.04
. o4
.16
1.65
1.89
1.85
1.97
2.13
2.44
2.13
1.89
1.57
1.81
.67
-91
1.10
·19
---
.20
.24
.55
.16
.20
-35
·35
.28
.08
.12
.16
.24
.12
.04
.08
.12
.20
--.08
--.04
--.04
May
June
July
Aug.
Sept. : Oct.
7.13
7·52
7.60
7.17
7.17
5.94
7.36
7.91
9.61
6.89
7-87
8.54
10.63
11.97
11.89
13-39
11.97
11.10
12.56
12.56
15.31
15.63
9-80
14.37
11.73
14.41
9.41
10.94
11.81
10.71
13.74
12.72
12.09
15.08
13.35
12.44
11.34
9.61
7.48
8.98
11.61
11.81
10.00
10.83
12.20
11.69
14.06
13-58
9-76
10.91
10.35
10.75
12.72
13.39
14.09
12.44
12.13
15.98
12.36
14.29
18.43
15.71
14.80
14.61
18.58
Nov. : Dec . : Total
6.89
7.32
12.76
10.98
7.24
10.16
9·25
10.87
14.09
11.81
13.46
11.69
13.70
.28
.20
.31
.16
.08
.24
·39
.28
.43
.04
.24
.31
-31
.47
.91
1.10
.98
1.57
1.61
1.50
1. 50
2.20
1.30
l. 73
1.65
1.97
60.47
65.63
75.08
67.64
66.65
74.41
70.16
81.65
89.33
69-96
75.63
69.57
78.94
:
tv
Source:
Ministerio de Defensa, Servicio Meteorologico Nacional.
Anexo al Boletin Meteorologico de El Salvador, 1959.
Table 2.--El Salvador: Average monthly and annual temperature at various stations
Station
:Eleva- :
: tion :
Feet
:
Years
of
record
:
:
Source:
:
:
:
:
:
:Jan. :Feb. :Mar. : Apr. :
:
:
:
: oF.
San Salvador ......... : 2,289: 1951-58: 71
Santa Cruz Porri11o .. :
98 : 1949-58 : 80
San Miguel ........... :
344 : 1950-58 : 80
San Andres ........... : 1,558: 1949-57: 73
Santa Tecla .......... : 3,132 : 1948-58: 67
:
:
:
:
:
:
:
May
:
:
:
:
: June
: July
: Aug.
: Sept . : Oct .
:
:
:
:
:
:
:
:
:
:
: Nov. : Dec . : Average
:
:
:
:
:
:
oF.
oF.
-
oF.
oF.
-oF.
oF.
oF.
oF.
oF.
oF.
oF.
oF.
72
81
82
75
69
74
82
84
77
71
75
83
85
78
72
75
82
83
78
72
74
81
81
76
71
73
80
8o
76
71
73
81
81
76
72
72
79
79
76
70
72
79
78
74
70
72
79
79
74
69
71
79
80
72
68
73
80
81
75
70
:
Anexo al Boletin Meteorologico de El Salvador, 1959·
Ministerio de Defensa, Servicio Meteorologico Nacional.
There are two distinct seasons, the wet and the dry. The rainy season begins in May and
lasts through October. Rainfall averages from 73 to 78 inches annually (table 1). The other
6 months are dry. These alternate wet and dry seasons exist throughout the country. The almost
complete lack of rainfall during the dry season has a decided effect on crops and dairy production.
Plantation owners in the coastal lowlands have noted temperature extremes from a minimum
of 68 degrees Fahrenheit to a maximumof109 degrees. In the highlands, from 3,300 to 4,900 feet
elevation, extremes of 32 degrees to 77 degrees have been reported. However, records covering
7 to 10 years from selected stations show· that annual average temperatures for the country
range from 70 to 80 degrees (table 2).
Land Use and Tenure
A high percentage of El Salvador's total area is utilized for agriculture, although there is
quite a bit of underused land in the large holdings. The percentage of agricultural land classed
as arable under cultivation is higher than the average 5 percent cultivated in other Latin American
countries. Table 3 shows utilization of agricultural land in 1950 as well as land potentially useful
for agriculture. The total of 3.8 million acres is roughly 70 percent of the total area of the
country.
Table 3.--El Salvador: Utilization of agricultural land, 1950
Acres
Class of land
Percentage of total
Arable land under cultivation ....... :
966,307
25.6
Tree crops ............................... :
378,607
10.0
Natural pasture ......................... :
1,308,362
34.6
Improved pasture ...................... :
. 432,131
11.4
Mountains & forests ................... :
507,815
13.4
Unused land .............................. :
188,206
5.0
Total. .............................. :
3, 781,428
100.0
Source: Atlas Censal de El Salvador. Ministerio de Economia, Direccion General
de Estadistica y Censos.
At the time of the 1950 census the cultivated area represented land devoted to cotton, grain,
sesame, sugar, and similar crops requiring cultivation. Tree crops included coffee, cocoa,
coconuts, and other fruits. The unused portion represented land not forested or used for agricultural production.
Based on the 1950 census the estimated use of land in recent years is about as follows:
34 percent for annual crops, seeded pastures, and perennial crops such as coffee, fruits, and
henequen; about 35 percent in native range, brush, and forest; and about 31 percent in urban
areas, roads, rivers, and lakes, or unaccounted for.
3
Most of the land is privately owned and is farmed by the owners or by tenants. The land
is divided into parcels ranging from plantations of several thousand acres to plots of one-half
acre or less. In fact, 40 percent of all farms are under 2.5 acres (table 4). The large farms,
usually encompassing the best land in the country, are owned by wealthy families and are
passed down from one generation to another. The small scale independent land owners and the
many landless workers make up the agricultural labor force. The laborers farm plots of land
as squatters or under arrangements with the owner, producing enough of the basic foods for
their own needs and spending a great deal of their time as migrant farm laborers.
Table 4.--El Salvador: Number of farms and farm area, by size, 1950
Farm area
Farms
Size of
farms
Number
Percent
1,000
acres
Percent
Less than 2. 5 acres ... :
70,416
40.4
87
2.3
2.5 - 7.4 acres ......... :
55,071
31.6
238
6.2
7.5- 12.3 acres ........ :
14,986
8.6
145
3.9
12.4 - 123.5 acres ..... :
29,598
16.9
1,058
28.0
Over 123.5 acres ......
4,133
2.5
2,253
59.6
All farms .............
I_/174,204
100.0
3, 781
100.0
!_/
The Agricultural Census of 1961 showed 226,456 farms.
Source: Direccion General de Estadistica y Censos. Primer Censo Agropecuario
1950, El Salvador.
At the present time lands suitable for agricultural development are estimated at no more
than 100,000 acres. The Government owns limited amounts of land which are being colonized
under auspices of the Instituto de Colonizacion Rural (Rural Colonization Institute). However,
increased educational and other assistance directed toward better farming and improved living
for more people are needed in land settlement programs in El Salvador. An organization of
citizens known as "Amigos de la Tierra" has long been active in promoting education in and
application of conservation practices, but there is still much to be done. An interesting sidelight
concerning "Amigos de la Tierra" is that the creation of the Ministry of Agriculture was a
project of this organization and virtually every Minister of Agriculture was first an "Amigo."
The organization is not sponsored by the Government but has proved to be very influential in
agricultural matters.
Population
El Salvador retains the questionable distinction of being one of the most densely populated
countries in the Western Hemisphere. In number of persons per square mile it is exceeded only
by certain Caribbean Islands-for example Haiti, Jamaica, and Puerto Rico. One of El Salvador's
most vital needs is for basic education for all of the people, not limited to those who can afford
higher education. Such instruction and training will help to reduce illiteracy and bring basic
educational skills to the masses.
4
Estimated population for 1962 stands at 2.6 million. Thus, among the Central American
countries, El Salvador is second only to Guatemala in total population. Annual rate of increase
is about 3.4 percent and density per square mile amounts to around 317 persons. Overpopulation
is one of the country's most pressing problems and is causing migration to neighboring countries.
At the same time there is a shortage of labor when the three major crops are being harvested
and migrant laborers from Guatemala and Honduras are allowed to enter the country to help with
the harvest.
Provisional 1961 census figures show that 61 percent of the population live in rural areas.
Other sources estimate that half of the people over 10 years of age are directly engaged in some
kind of agricultural enterprise.
About 92.3 percent of the people are "mestizo," or mixed white and Indian races.
Transportation and Marketing
El Salvador is served by 5,097 miles of roads, 388 miles of rail lines, 3 ports, one international airport, and several small airports. Its highway system, which includes 457 miles of
hard surface, is the best in Central America. There are very few parts of the country that
cannot be reached by some kind of road.
The Inter-American Highway covers a distance of 170 miles from the Guatemalan to the
Honduran border and iscompletelypaved.Itpassesthrough three of El Salvador's most important
cities, Santa Ana, San Salvador, and San Miguel.
Completion of the coastal highway early in 1962 reduced the driving time between San Salvador and Guatemala City by several hours. This highway crosses the Pacific lowlands which
have the only potentially important agricultural lands not yet fully developed. By mid-1962
construction of approximately 20 feeder roads totaling about 197 miles was near 83 percent
completion. These roads will facilitate the distribution of farm products within the country as
well as speed export crops to the ports.
No private rail lines serve large plantations as is the case in Costa Rica and Honduras.
The El Salvador division of the International Railways of Central America, owned by U.S.
companies, operates 286 miles of line between the port of La Union and the Guatemalan border,
with a branch extending southward through Santa Ana and thence to Ahuachapan. In October 1962
the British-owned Salvador Railway Company, Ltd., and the Government of El Salvador signed
an agreement transferring all equipment and properties of the railroad to the Government.
This railroad operates between the capital and the port of Acajutla by way of Armenia and
Sonsonate, with a branch extending to Santa Ana.
The country's railroads are important in local traffic. They connect all important areas
of the country with two of the ports and the capital. They are still the most important means
of moving freight, but they are facing increasing co.mpetition from the country's good highway
system.
Of the three ports serving El Salvador, Cutuco-La Union is the most important in terms
of volume of total trade. This port is located at the eastern end of the country. Warehouse
storage facilities with a capacity of around 15,000 tons are available and port facilities in
general are better than those at La Libertad or Acajutla.
5
La Libertad is located only 23 miles south of San Salvador. The connecting highway is
excellent but there are no rail connections. Storage facilities include several private warehouses
and a customs warehouse.
Acajutla is the country's westernmost port and is approximately 53 miles from San Salvador.
With the recent inauguration of the breakwater pier and the construction of storage facilities,
Acajutla has assumed much greater importance in the country's overseas trade. Furthermore,
during the second quarter of 1962, the CentralAmericanBankfor Economic Integration announced
a loan of $200,000 for construction of additional unloading and storage facilities for wheat at
this port.
El Salvador also has access to the Guatemalan port of Puerto Barrios through its connections
with the Guatemalan division of the International Railways of Central America.
The international airport, Ilopango is situated about 6 miles east of San Salvador, near the
Inter-American Highway. It handles most of the air traffic entering and leaving the country. For
some time there have been plans for enlargingllopango to accommodate jet aircraft. Government
negotiations for purchase of 164 acres of land adjoining the airport have been announced. This
would permit enlargement and improvement of the present facilities including construction of
a 7,400 foot runway.
In early 1961 the Development Loan Fund and the Export-Import Bank announced approval
of a loan of $4.25 million to the Salvadoran Government for modernization and improvement of
the airport and runways, and purchase of navigation, lighting, and firefighting equipment. The
mountains surrounding Ilopango present hazards as far as jet planes are concerned.
Marketing and storage services are offered by the cooperatives representing coffee,
cotton, sugar, rice, and milk. They also assemble, clean, and grade these commodities, thus
facilitating their entry into commercial channels. Marketing coffee, cotton, or sugar presents
no outstanding problems because of (a) the small size of the country and (b) accessibility to
ports by highway or rail.
Storag/e facilities for coffee in Salvadoran ports are supplied by the transportation companies
at very nominal rates. Free storage is allowed for 90 days and after this a small monthly charge
is levied. Free storage is accorded only to coffee consigned to Salvadoran exporting firms;
that consigned to foreign firms must pay the storage charge from the time of its arrival at the
port.
The Instituto Regulador de Abastecimientos (Grain Stablization Board) has a total storage
capacity of 19,780 metric tons at San Martin, 1,380 tons at San Salvador, and 9,200 tons at
La Union. Proposed warehouses in other sectors would bring total Grain Board storage to
32,200 tons.
Such well developed marketing organizations are not available to producers of fruits and
vegetables. 'These commodities are produced on a small scale on widely scattered farms and
the market is limited to urban areas. The marketing is done mostly by women, who travel on
foot into the cities carrying on their heads a large basket filled with an assortment of grain,
fruits, vegetables, baked goods, and eggs. They spend a great deal of time at the marketplace
trying to sell all their produce, but are often unsuccessful (fig. 1).
6
Figure 1.--A woman weighs maize in preparation for a sale.
Rural residents living at some distance from the cities usually consume what they harvest
or they may exchange it for other necessities.
Most public markets are owned and operated by the municipality in which they are located;
however , a few are privately owned. Some are housed in new and fairly well equipped buildings,
but most are poorly operated and often lack storage, refrigeration, or sanitary facilities.
AGRICULTURAL DEVELOPMENT
A high proportion of El Salvador's total area is used for agriculture. In general the terrain
is fairly rugged, which in itself is not a limiting factor insofar as the cultivation of the big money
crop is concerned . In fact , coffee cultivation has probably benefited the land by providing cover
and protection from the hot sun and torrential rains.
The cultivation of sugar cane is also carried on largely in the upland plateaus of the interior .
Production of sugar has almost doubled within the past decade even though acreage has shown
very little increase.
7
Cotton is produced with a high degree of efficiency in the Pacific coastal areas; yields per
acre are among the highest in the world. In these areas also lies El Salvador's main hope for
expansion of agricultural land.
But the campesino, a small or subsistence farmer, who tries to wrest a living from the
steep hillsides is fortunate if indeed he can manage to exist on what he is able to produce. With
little prospect for more land or alternative employment his "new frontier" must be in his
learning and putting into practice better land management and production techniques to maximize
the returns from his meager holding. By maximizing production, the lot of the subsistence
farmer may be improved by increasing his food supply although a significant impact is unlikely
in terms of increased food supplies in the market.
Agricultural Output
Based on a 3-year (1952/53-1954/55) average, El Salvador's index of agricultural production
stood at 162 in 1961-62. Coffee, cotton, and sugar accounted for the increase but the three basic
food crops, corn, beans, and rice either remained about the same or declined.
Population increased during this time by 25 percent, or more than a half million people,
and per capita agricultural output climbed to 30 percent above the base period.
Coffee and cotton determine the trend of total agricultural output in El Salvador, and have
been mainly responsible for the continuing increase in total production. However, food production
has declined both in total and on a per capita basis.
Production Practices
The production of cotton is accomplished with the aid of modern farming techniques. The
level coastal areas where cotton is produced are eminently suited for mechanization and most
of the holdings are large enough to make this practical. Data of the Ministry of Agriculture
indicate that 965 wheel tractors and 428 caterpillar tractors were used by cotton farmers in
the 1960-61 crop year. The larger producers also make generous use of disease and insect
control measures and of fertilizers. Harvesting is still done by hand, as mechanical picking is
not practical due to irregularity of the fruiting period.
Coffee production on the other hand is mostly dependent upon manual labor, as the steep
terrain and presence of shade trees make the use of machinery difficult. Two of the operations
demanding the largest amount of labor--weeding and picking--are done by hand, Some planters
have experimented with the use of machinery in cultivating areas where new fields are to be set
out and also in making furrows instead of holes in which to plant the young trees. However,
these practices so far are not widespread.
Sugar cane is produced on both large and small farms. Some of the plantations are quite
thoroughly mechanized and these produce the raw sugar that is refined for domestic consumption
and for export. On the small farms sugar cane is cultivated, along with other crops, in a primitive
manner. From this cane the farmers make the crude brown sugar known as panela.
Food crops, to an extensive degree, are produced under the rather primitive conditions
common to the area. The campesinos hack off and burn the small trees and other growth on the
8
hillsides to plant their corn and beans. Cultivation and weeding, if any, is done with a machete
and little fertilizer is used. Needless to say, this method of farming encourages and hastens the
erosion that has already carried off millions of tons of a resource that El Salvador can ill afford
to lose--its soil.
Dry season irrigation has been practiced for many years, but on a limited scale. Yields
on irrigated lands are two or three times those on nonirrigated lands. The Pacific coastal
plain is reported to have underground water resources which would make irrigation possible in
that area. The area under irrigation at present is probably under 10,000 acres, and is used
primarily as pasture.
The consumption of chemical fertilizer materials by the more prog;ressive farmers is
increasing, as shown by the following import data from official Salvadoran trade statistics:
Year
Short tons
1958........................................
1959.. ... ... . . . . .......... .... .... ..........
1960 ........................................
1961... ......... ........ .... .... ...... ......
63,533
75,398
83,655
84,667
The consumption of organic fertilizer is also showing some increase. Materials used
include coffee pulp, dung, bone meal, blood, and compost made from city garbage. The use of
pulses and crop rotation as a means of preserving soil fertility is gradually gaining favor.
Agricultural Policies
Policies for the development of agriculture are formulated by the Ministry of Agriculture
and put into practice to a great extent by various producer associations and cooperatives, and
by financial institutions.
Although El Salvador's basic program for agriculture dates back to the National Agricultural
Law of 1907, adefinitepolicybegantounfold with the establishment of the Ministry of Agriculture
in October 1946. Prior to this an agriculture department within the Ministry of Economy was
responsible for agricultural matters.
One of the most important of current policy goals is increasing agricultural production
through more efficient farm practices, and both government and outside technical assistance
programs are directed toward this goal. With population increasing at 3.4 percent annually the
country is not now producing enough to feed the people even at present low consumption levels,
and substantial imports of corn, rice, and beans are needed.
In addition to encouraging the production of subsistence crops, the Government is backing
research aimed at increasing the yield of coffee per unit of area. The planting of sungrown
coffee is being tried, and emphasis is given to heavier fertilization and the use of higher yielding
varieties.
Research programs for improving agriculture are being carried on by the Ministry of Agriculture, assisted by U. s. technicians. Since 1943 technicians have been working in El Salvador,
9
and in ear1y 1955 an agreement between the two governments was signed providing for a joint
research service known as the Servicio Cooperative Agricola Salvadoreno Americano, SCASA
(Cooperative Agricultural Service).
Objectives of the cooperative program of SCASA were: to assist in the development of
agriculture in El Salvador, to increase the exchange of knowledge, skills, and techniques in the
field of agriculture, and by these joint efforts to promote understanding and good will between
the two countries.
In May 1960 El Salvador requested thattheagreement be terminated on December 31, 1960,
thus officially recognizing that the objectives of the Servicio had been fulfilled. However,
El Salvador requested the continuance of U. S. advisory and training assistance. The activities
of the Servicio wer,e taken over by the Direccion General de Investigaciones Agronomicos
(Agricultural Research Department of the Ministry of Agriculture). The Ministry now seems
particularly interested in land reform, supervised credit, and improvements in marketing
arrangements as measures for social and economic improvement.
Headquarters for El Salvador's research activities are located in Santa Tecla, near
San Salvador. Besides these facilities there are experiment stations at San Andres, Santa Cruz
Porrillo, and Izalco. Research has brought about many improvements, but there is still quite
a lag between the work of the experiment stations and agriculture as it is commonly practiced.
The station at San Andres operates in conjunction with the National School of Agriculture,
which has facilities for training about 200 boys.
The Extension Service is closely associated with the research program of the Government
(fig. 2). It is a separate agency ofthe Ministry, having its own budget and personnel. This agency
Figure 2.--Panorama of contour-plowed field. Government agents teach contour
plowing to aid in soil conservation.
10
offers educational services through extension agents to adult farmers. It reaches the youth of
the country through the 4C clubs (Cabeza, Corazon, Conocimiento, Cooperacion) of which there
are now 139 with a membership of 3,500 to 3,600 (fig. 3).
Figure 3.--Boys and their poultry at a 4-C Club. This organization is similar
to our 4-H Club.
El Salvador is also pushing industrial development. In October 1955 the Instituto Salvadoreno
de Fomento de la Produccion (Salvadoran Institute for the Development of Production) was
established whose function was to assist in the organization or expansion of agricultural and
industrial activities and the guaranteeing of credit from both domestic and foreign sources.
In December 1961 this agency was reorganized, orientingits efforts entirely toward the development of industry.
Producer organizations play a key role in agric1,1ltural policy and program implementation.
One of the first and most important of the producer groups is the Asociacion Cafetalera de
El Salvador (Coffee Grower's Association). Most of the commercial planters belong to this
organization which is politically and financially influential. The Campania Sal vadorena ·del
Cafe, CSC (Salvadoran Coffee Company), another influential coffee organization, is owned by
private shareholders, the Mortgage Bank, and the Coffee Grower's Association. There are two
representatives of Government on the five-man Board of Directors and the fifth member is
11
·subject to approval by the Government-owned Central Bank. The original purpose of the CSC
was to control domestic market prices through its purchase of coffee. However, its financial
resources are now used largely to provide short-term credit to producers. esc buys, processes,
and exports coffee.
The Instituto Salvadoreno de Investigaciones del Cafe (Salvadoran Institute for Coffee
Research) is supported by the Government and is operated by an advisory board composed of
the Ministers of Agriculture and Economy and representatives of the coffee industry. The
ISIC is in charge ofallresearchworkon coffee. Projects having major emphasis are those aimed
at increasing coffee production per unit of area, thus reducing production costs, improving
quality of coffee, and developing new coffee products.
Still another organization for the regulation of the coffee industry is the Departamento
Nacional del Cafe (National Department of Coffee) which is the chief policy making body for
coffee matters.
The sugar industry is regulated by several influential organizations. One of these is the
Comision de Defensa de la Industria Azucarera (Sugar Industry Defense Commission) composed
of the Ministers of Agriculture and Economy and representatives of the sugar producers. This
agency was organized in 1932 for the purpose of regulating and protecting the sugar industry.
It regulates the price of sugar, establishes production quotas for domestic consumption, and
issues export licenses for sugar and import licenses for machinery for the sugar industry.
Another is the Asociacion deAzucareros de El Salvador (Sugar Producer's Association)
organized in 1949 with a twofold purpose: (1) to arrange for the stable marketing of centrifugal
sugar, and (2) to form a strong group to represent the interests of producers with respect to
legislation.
The cooperative marketing organization (Cooperativa Azucarera de El Salvador) is also
vitally interested in promoting the sugar industry and was responsible for the establishment of
the country's sugar refinery.
There are around 1,100 cotton producers in El Salvador, though at one time there were as
many as 5,000. The law requires all growers to belong to the Cooperativa Algodonera Salvadorena,
Ltda. (Salvadoran Cotton Cooperative). The Cooperative is a very efficient organization and closely
controls the production and marketing of the cotton crop. It provides seed, fertilizer, insecticides,
and technical advice for its members and handles the ginning, storage, and sale of cotton. It also
processes a small amount of the cottonseed for oil.
Agrarian Reform
No specific projects for agrarian reformhaveyetbeen announced by the new administration
in El Salvador. The Directorate which governed the country just prior to the April 29, 1962,
elections had announced plans for making land available to landless farmers. Reportedly the
Government had received offers from land owners who wished to sell or donate land for such a
purpose.
A soil survey of the country is in progress and the Government plans to make a cadastral
survey which will provide basic mapping and delineation of property lines. As a start toward
development of the Pacific coastal plain the Inter-American Development Bank has made a loan
12
of $1.7 million for irrigation and flood control in the Zapotitan valley. This will make possible
the year-round cultivation of 10,300 acres of land that is now productive only during the dry
season. The Bank has also made a loan of $2 million for relending to small farmers for the
development of agriculture and animal husbandry.
The Government of El Salvador has also recognized the need for improving the lot of the
small farmers who produce so much ofthecountry's food supply. It has inaugurated a supervised
credit program for small farmers and is considering a land reform program and improvements
in the marketing system. Housing and sanitation, and additional schools and health facilities for
rural areas also are planned under the Alliance for Progress. These indications of concern on
the part of the Government should bring hope to the many who now live in an almost hopeless
condition.
Agricultural Credit
Provision for the credit needs of farmers is a development of comparatively recent times.
Banking and credit facilities existed for the trade, and loans to producers were made to aid in
marketing rather than to stimulate production or to promote rural welfare.
Credit has always been available to the large agricultural operators through the cooperatives
and producer associations, but until recently the small producers had very limited access to
credit on terms that they co~d meet. In December 1961 the Government, in line with its policy
of improving the lot of farm labor and small producers, passed a law establishing the Administracion de Bienestar Campesino, ABC (Peasant Welfare Administration). This agency is to use
currency from sales of wheat purchased under Title IV, Public Law 480, for rural supervised
credit programs. Loans are limited to farmers owning less than 50 acres of land. This program
has not come up to expectations because El Salvador took only $800,000 worth of the wheat
programmed instead of the $2.0 million expected. However, two loans totaling $1,520 had been
made and 30 others for unspecified amounts had been authorized by the end of 1962.
Banking institutions in El Salvador consist of one government-owned bank and one which
is supported largely by the Government, seven commercial banks, the Federacion de Cajas de
Credito (Federation of Credit Boards) and its affiliates, the Cajas Rurales de Credito (Rural
Credit Boards).
The Central Reserve Bank was created in 1934. Its shares were owned largely by the
Asociacion Cafetalera and private banks, with a few owned by private citizens. In 1961 the
Government took over the bank. Its chief purpose is to maintain monetary conditions which will
best promote the economic development of the country.
The Banco Hipotecario (Mortgage Bank) was also created in 1934. Most of its credit operations consist of long-term mortgage loans. The Federacionde Cajas de Credito and the branches
associated- with it were created to protect and improve the status of small producers and to
develop credit by cooperative organization. Of the commercial banks, the Banco Agricola Commercial de El Salvador specializes most in small agricultural and commercial loans. The others
concentrate more on the needs of middle-income groups.
PRODUCTION PATTERN
Approximately one-fourth of El Salvador's agricultural land is devoted to the production
of food crops and their farm value has been estimated to be second only to that of coffee.
13
Pasture land in 1950 exceeded the combined total in cultivated and tree crops but there are
indications that more pasture land has been put into cultivation since that time.
Export Crops
El Salvador exports a number of agricultural commodities but none approaches coffee in
importance as a source of foreign exchange. In 1961 raw coffee and coffee products--mostly
soluble coffee--accounted for 61 percent of all exports by value (table 5).
Authorities do not agree as to the exact time of the introduction of coffee into El Salvador.
Records dating back to 1820 make mention of the coffee plant. One legend relates how a Brazilian teacher came to El Salvador in 1839 and bought a small farm near the capital. He planted
coffee trees and taught his students how to cultivate them. Another story asserts that coffee was
introduced from Guatemala around 1866.
Whatever its origin coffee soon became a crop of paramount importance in the economic
life of the country, and the major single source of employment. Around the middle of the nineteenth century it replaced indigo, balsam, and cocoa as the basis of the country's economy (fig. 4).
Figure 4.--Part of a modern coffee mill. Coffee berries are de-pulped by
machine, thoroughly washed, dried in the sun, and stored tn silo,pending
shipment to market.
14
Exports of selected agricultural commodities,
1957-61 y
Table 5.--El Salvador:
1957
Commodity
:
Unit
:
:
Quantity:
:
Coffee beans
:
Cotton fiber
:
Coffee essences and extracts :
.....
en
Sugar
Animal feed
Vegetable oils
Margarine and other fats
Live animals, principally
for food
Sesame seed
Cotton waste
Cotton seed
Fresh and preserved
vegetables
Rice, milled
Fresh and preserved fruits
and nuts
Eggs, fresh, preserved
dried
Honey
Other agricultural
commodities
Total agricultural
exports
Total, all exports
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
Pounds
:
:
---
:
:
:
-----
1/
gj
i(
-r,ooo
1,000
units
: 1,387
. ll6
1,549
109,844
15,618
3,945
1,341
137
1,305
84,098
17,825
3,258
1,383
202
2,407
71,276
22,938
4,974
1,492
125
2,5o8
76,675
15,524
4,291
1,443
163
1,815
70,150'
20,955
2,580
6
: 47' 598
: 7,188
: 1,353
648
1,244
1,047
339
9
43,978
3,6;_,9
885
1,085
975
217
8
49' 566
3,699
1,876
1,001
1,324
607
478
13
40,855
6,228
3,156
1,376
1,333
1,000
754
16
56,273
9,809
4,771
1,594
1,533
1,393
1,065
1,227
535
215
13
5,664
5,990
413
---
1,386
665
268
14
6,364
6,995
9,865
---
852
614
243
240
3,194
7,147
179
---
810
380
360
290
2,412
204
196
--1, 433
238
ll8
1,668
---
263
141
2,764
:
---
80
242
---
515
:
:
:
:
--1,261
69
151
1,440
108
156
--997
323
lo8
1,270
400
136
1,567
224
174
:
:
---
530
---
1~25
---
1,133
---
1,046
---
1,895
:
-----
135,905
---
111,627
107,030
116,023
-----
104,168
---
-----
105,078
138,464
-----
:
:
:
:
:
:
---
4,284
4,374
468
---
:
:
Including re-exports.
132.276 pounds each.
L~80 pounds net .
.::!:/ Raw value.
Source: Anuario Estadistico.
Value
1,000
dollars
:
---
:
1,000
units
:
:
Value : Quantity:
:
1,000
dollars
:
:
:
:
:
1,000
units
-----
Percent
Agricultural exports as
percentage of total
exports
Value : Quantity:
:
1961
1,000
dollars
:
:
:
-----
:
:
1,000
units
---
---
:
:
:
:
1960
1,000
dollars
:
:
:
Pounds
:
Value : Quantity:
:
:
:
:
1959
1,000
units
Bags gj
Bales 'j)
Pounds
Short
tons !:}
Pounds
Pounds
Pounds
Pounds
Pounds
Pounds
:
Value : Quantity:
:
:
:
:
1958
:
:
:
---
98
5L~9
Percent
---
96
113,373
---
---
-----
Percent
---
94
Ministerio de Economia, Direccion General de Estadistica y Censos.
952
316
3,671
249
8,937
6 10,178
332
220
468
116,792
---
3,339
-----
Percent
---
90
dollars
274
256
235
119,098
Percent
---
87
Coffee is grown in al114 departments of the country, but almost one-third of total production
comes from Santa Ana. Other important producing areas are in La Libertad, Ahuachapan,
Sonsonate, Usulutan, and San Salvador. Coffee is produced on 35,795 farms, the majority of
which are small. The national average for acres in coffee per farm is 8,6, Around 56 percent
of the farms are less than 25 acres and almost 3.5 percent are more than 125 acres. However,
the latter group produces 62.4 percent of the total crop, which in 1961-62 was a record 1.9
million bags (table 6). The yield per acre of the small producers is only half that of the larger
plantations. The percentage distribution of coffee growers by altitude is as follows:
Less than 1,500 feet ............ 19.94
1,500 to 3,000 feet ............... 58.78
Over 3,000 feet ................... 21.28
100.00
According to the Second National Coffee Census, 1957-58, there were 308,000 acres in
coffee trees. The coffee producers own their own land and the industry is entirely in the hands
of nationals. Peak month of coffee worker employment is in December when about 190,000 people
are working in the coffee industry. In April it drops to about 30,000 workers--the low month of
the year.
Table 6.--El Salvador: Estimated production of principal crops,
average 1950-54, annual 1959-61
Unit
Crop
Coffee ....................... : ];_/ 1 ,000 bags
Average
1950-54
1959
1960
1,216
1,575
1,450
1,900
1961
Cotton ......•...............• :
Cottonseed ................. :
Centrifugal sugar,
raw value ................. :
1,000 bales
1,000 s.t.
53
25
137
66
184
88
259
125
1,000 s.t.
35
56
58
70
N oncentrifugal sugar ... :
1,000 s. t.
22
29
19
20
Corn ......................... :
1,000 bu.
7,260
5,900
7,100
5,700
670
226
222
231
Beans ....................... : ~/1,000 bags
:
Rice (paddy) ............... :
Grain sorghum ~/ ......... :
Tobacco .................... :
Mil. lbs.
Mil. lbs.
1,000 lbs.
62.9
202
1,283
41.9
165
1,943
44.1
180
1,975
39.7
183
1,950
Henequen .................. :
Mil. lbs.
,!/5.8
4.4
4.0
5.0
1/ 132.276 pounds each.
100 pounds each.
Official statistics.
Average 1951-55.
2/
3/
4/
Source: Foreign Agricultural Service, except as noted.
16
Many of the coffee workers are migrants. In fact the ratio of seasonal to permanent
laborers in El Salvador is very high. At the height of the coffee picking season temporary
workers are also needed to harvest cotton, sugar, and a few minor crops. When the coffee
harvesting season approaches, large groups of people, often whole families, move in from
areas where farm work is seasonally low. Many also come from Guatemala and Honduras. The
workers move from area to area, following the maturing of the coffee berries.
Exports of raw cotton, cotton linters, and seed in 1961 amounted to $21.6 million, or 18
percent of total exports--a marked contrast to returns of only $2.6 million a decade ago.
El Salvador's cotton is grown mainly in the fertile coastal plains. The Department of
Usulutan accounts for more than one-third of total production. Other important producing
departments are San Miguel, La Paz, La Union, and San Vicente. Yields per acre for the
1961-62 crop averaged 1.4 bales compared with 0.9 in the United States.
Significant cotton production in El Salvador dates back only to the mid-1930's. By 1950
it had become the second most important export crop. Production has increased from 27,000
bales in the 1950-51 crop year to 259,000 bales in 1961-62. Production has been encouraged by
the Cotton Cooperative, an organization of cotton growers interested in the promotion and use
of Salvadoran cotton at home and abroad. About 10 percent of the crop is used by the Salvadoran
textile industries. The Cooperative also energetically promotes better production practices,
such as disease and insect control, fertilization, and soil conservation. All sales of cotton are
made through this organization and the cotton is graded according to standards used in the
United States.
When surpluses threatened in the early days ofEl Salvador's commercial cotton production
the Government issued strict regulations for control of the industry. A decree required that all
cotton growers must belong to the Cooperative, that all persons, firms, or corporations ginning
cotton must be licensed and members of the Cooperative, and that all cotton consumed domestically must be bought from the Cooperative. Other measures include destruction of unlicensed
ootton and fines for the producers; burning of old cotton stalks and fumigation of seed for planting; and other measures for the control of insect pests and disease.
Cotton acreage must be registered with the Ministry of Agriculture and only members of
the Cooperativeareissuedlicensestoplant. However, the Ministry is not known to have restricted
cotton acreage. The Cooperative gins almost the entire crop and markets not only the lint cotton
but the cottonseed and linters as well. In 1950 the Cooperative established its own mill for
crushing cottonseed. It acts as a credit agent for its members, securing credit from the banks
and re-loaning it with the crop as security.
Expansion of cotton acreage has been limited by the scarcity of land. The expansion that
has taken place has been at the expense of corn and other food crops.
No other crops grown in El Salvador can quite compare with coffee and cotton in commercial
importance. Although sugar cane has been replaced by cotton as the second leading commercial
crop, it is still an important minor export crop. It also takes its place with corn, rice, and beans
as an important item in the diet.
San Salvador Department produces the greatest quantity of sugar. Other large producing
'departments are also in the western half of the country.
17
Production practices are steadily improving. Better varieties of cane are being planted
and fertilizer is being used more and more. So far only about 14 percent of the cane area is
irrigated.
Although acreage planted to cane for the production of centrifugal sugar increased by
13 percent in the 11-year period, 1950/51-1961/62 theproduction of sugar increased by 115 percent according to the Department of Agricultural Economics of the Ministry of Agriculture.
In 1950 there were 23 sugar mills which produced 29,000 short tons of sugar while in 1961 it
was estimated that 5 of the larger mills produced 32,000 tons. A total output of 70,000 short tons
was realized from the 1961 crop (table 5).
Output of sugar is being increased by more efficient operation of the mills and better
production practices of cane planters. There are now 21 mills in the country and 15 of these are
operated by members of the Sugar Grower's Association. Membership is open to all producers
of centrifugal sugar.
A refinery established by the Producer's Cooperative began operations late in 1959.
Until the refinery was opened the sugar mills produced plantation white sugar, but now the
crude sugar is trucked to the refinery which turns out a fine white product. In an effort to
promote local sales the refinery is now putting up sugar in 2- and 5- pound paper bags as well
as large cotton bags. Domestic consumption of sugar is increasing at a rate of about 5 percent
a year and was estimated at 44,500 short tons for the 1961-62 crop.
The annual quota of 10,183 short tons assigned to El Salvador under the U. S. Sugar Act
Amendments of 1962, plus the 17,000 short tons authorized for purchase in 1961 and the first
half of 1962, has provided a new outlet for some of the country's surplus raw sugar.
Production of panela type sugar does not come under the jurisdiction of the Association.
It is consumed directly by the small farmers who produce it mostly for food and occasionally
for making alcohol. Current production is in the neighborhood of 20,000 short tons.
Molasses is now used in making livestock feed. It is combined with corn, corn husk, wheat
and rice bran, and coffee pulp. Production of molasses per ton of sugar is declining because the
greater efficiency of the mills yields more sugar and less molasses. El Salvador has recently
imported molasses from Guatemala to use in the production of feed.
Food Crops
Corn, rice, beans, and sorghum are the basic foods for most of the people, and the combined
value of these crops has been estimated to be second only to that of coffee. The Instituto Regulador
de Abastecimientos (Grain Stabilization Board) controls the price and regulates the supply of
these foodstuffs.
Corn is grown throughout the country, on good soil and poor, on hillsides and flat lands.
Heaviest concentrations of corn production are to be found in the flat lands around Sonsonate,
Armenia, and Izalco and the coastal belt of the departments of La Paz, Usulutan, San Vicente,
and San Miguel.
Sorghum and beans are secondary crops that are usually interplanted with the corn.
However, the varieties of beans planted thrive best in the climate and soil conditions of the
central plateau.
18
Rice is grown in small quantities in practically all sections of the country but over onethird of total production comes from three departments--La Paz, Usulutan, and San Miguel.
Rice, along with other grains declined in acreage planted as cotton acreage increased. It is
believed that this downward trend has now been reversed, as marginal cotton and pasture lands
in the coastal area are being planted to rice. However, there will probably be no great increase
in yields unless there is a wholesale shift to irrigated varieties. There is only one large farm
that produces irrigated rice in commercial quantities.
In recent years it has been necessary to import varying amounts of the basic food commodities. These commodities, according to a study made in 1958, furnish almost two-thirds of
the calories in the daily diet._:!:/ At the present rate of population growth it will be necessary
to continue importing them in order to maintain present consumption levels. Production in
recent years is shown in table 6.
Wheat is produced in the northern part of the country, in the Department of Chalatenango
and other areas adjacent to Honduras. Production in recent years has been estimated at between
4,000 and 5,000 bushels.
Sugar and panela also are important foods for Salvadoran farmers and for a between-meal
pickup they chew sections of the cane stalk. The production of panela is strictly a home industry,
carried on in a primitive manner. The small moist cakes of brown sugar are consumed on the
farms producing them or they can be bought in local markets.
Fruits and vegetables are grown and consumed throughout the country. Among the fruits
available are bananas, plantains, oranges, mangoes, papayas, avocadoes, pineapples, zapotes,
and granadillas (passion fruit), and delicious melons.
A group of farmers is interested in forming a cooperative to market melons in the United
States during
our winter months. This would require meeting U. S. market demand for a
volume supply of high quality, uniformly sized, and graded melons at competitive prices with
adequate and regular ocean transportation assured.
El Salvador produces henequen. kenaf, sesame, tobacco, balsam, and wood for local consumption and for export.
The nucleus of the henequen industry is a small group of large producers who market
their fiber through the local bag factory, Fabrica de Sacos de Cuscatlan. In addition there are
several thousand small farmers who cultivate henequen patches of various sizes.
The Fabrica handles about 80 percent of all henequen fiber produced. The remaining
20 percent is used in the local handicraft industry. Any surplus fiber is exported.
There are no direct cash subsidies to the henequen industry but there is legislation that
effectively encourages fiber production. A high import duty on competitive fibers protects the
domestic industry and a regulation requires that Salvadoran coffee must be shipped in locally
made bags.
1/ U. S. Foreign Agricultural Service. Food Balances in Foreign Countries. FAS-M-104.
22 pp. Nov. 1960.
19
At present henequen production is more or less static. Experimental plantings of kenaf
have been made looking toward the eventual replacement of henequen with kenaf, which is a
cheaper fiber as well as less prickly to handle.
Small quantities of several other fibers are also produced and are used in the handicraft
industry. A fiber made from palms growing wild in areas bordering the Pacific, particularly
in the Department of Usulutan is used for hat braids and baskets. Basket fibers are produced
from a wild cane known as Vara de Castilla and from native bamboo. Tule or bulrush fibers
are produced in San Miguel and Sonsonate and are used in making furniture and sleeping mats.
Production of sesame seed, a fairly important export, is believed to be declining. Recent
estimates run around 3,000 short tons annually.
El Salvador produces flue cured, air cured, and burley tobaccos. Total production amounts
to almost 2 million pounds (table 6). The flue cured and burley are used by a local cigarette
company which assigns area quotas to the producers. Dark tobacco is used in making handmade
cigars and cigarettes and several million pounds are imported from Honduras each year. Flue
cured tobacco is also imported from the United States to be used for blending in machine-made
cigarettes.
Balsam of Peru--erroneously so-called--comes from the stately trees growing along
El Salvador's "Balsam Coast," a 40-mile stretch along the Pacific between Acajutla and
La Libertad. In addition to the sap the tree is said to yield superb cabinet wood. The sap is
valuable in medicine, for both internal and external use, and is a good base for perfume. Although
these uses for the sap have been largely taken over by synthetic materials, some of the balsam
sap is still exported. In 1961 exports of 117 short tons valued at $199,000 were made.
El Salvador has no actual or potential lumber production. Such forest resources as do
exist are exploited for fuel and some simple construction lumber. A program of reforestation
and management is urgently needed to replenish the country's fast disappearing forest resources
and as a measure for controlling soil erosion.
Livestock and Products
Cattle and hogs are the predominant types of livestock in El Salvador. However, it has
fewer cattle in relation to population than any country in Central America, except for Guatemala
and British Honduras. Estimated cattle numbers since the 1950 census showed an increase up
to 1956, after which there was a slight downward trend. Cattle population at this time may be in
the neighborhood of 900-950,000 head. Hog numbers have declined rather drastically since the
1950 census, from almost 390,000 head to an estimated 230,000 in 1960, The number of horses,
mules and asses, and sheep and goats seems to be declining. As of June 1958, total livestock
numbers as estimated by the Ministry of Agriculture were as follows:
Cattle ........................ . 778,304
Pigs ......................... .. 198,563
14,665
Sheep and goats .......... ..
74,538
Horses ..................... ..
27,302
Mules ........................ ..
Asses .............. ...........
2,206
Chickens ..................... 1,456,614
20
Fairly large numbers of cattle and hogs are imported from Honduras and some cattle
from Nicaragua. Most of the imported cattle are pastured for a time in El Salvador, then exported
to Guatemala.
The cattle in El Salvador are of the "criollo" type and are used for the production of both
meat and milk. There is a relatively small admixture of any of the improved beef or dairy types.
The Government is interested in improving breeding stock, dairy stock in particular, and
registered and purebred animals may be imported duty free. Recently the Government sent
purchasing missions to the United States to buy dairy and beef cattle and swine to be used in the
livestock improvement program (fig. 5). In addition to a program of upgrading through breeding,
the livestock industry needs improvement in management, nutrition, and parasite control.
Progressive dairymen use supplemental feeding during the dry season, and in the Pacific
coast livestock areas, irrigation of pastures is sometimes the practice.
Figure 5.--Cross-bred calves and their mothers. Through breeding, the
Government hopes to increase the size of beef cattle and to improve the
quantity and quality of milk production.
A commercial poultry industry is slowly developing and the value of imported purebred
chicks is equal to approximately 13 percent of the net value of all livestock imports. El Salvador
is a net exporter of eggs, mostly to Guatemala.
21
Information on totalproductionoflivestockproducts is sketchy. Beef production is estimated
at around 48.5 million pounds and pork production at 15.4 million pounds annually. The tallow
produced is used primarily in the manufacture of soap and sizable quantities are also imported,
mostly from the United States. The local shoe manufacturing industry uses all of the hides
produced and some imports are also needed.
There is a consumer preference for hog lard but the country does not produce enough to
meet domestic requirements and imports are still being made. However, the lower priced
vegetable shortenings are also used increasingly.
Official statistics on annual fluid milk production are believed to be high because they are
based on the 1950 Census which was made during the rainy season when pastures were at their
best. Unofficial estimates run around 250 million pounds. The consumption of dairy products is
increasing, thanks in part to the efforts of the dairy producer cooperatives. The dairy plants in
San Salvador are trying to educate the consumers to appreciate clean, sanitary milk and to wean
them away fro:m the unsanitary and adulterated product that is sold on the city streets.
DOMESTIC CONSUMPTION OF FOOD PRODUCTS
Food consumption in El Salvador, in terms of total calories, is among the lowest in Latin
America. According to a study made in 1961 average daily per capita food consumption was
estimated at 1,975 calories, compared to the accepted minimum standard of 2,500 . .!/ The study
showed that the diet is deficient in total proteins and fats, though protein from animal sources .
exceeded minimum requirements. Estimated wheat consumption was far short of the amount
needed to meet minimum nutritional requirements.
The basic foods for the rural people who make up over two-thirds of El Salvador's 2.6
million are corn, grain sorghums, rice, and pulses. These products account for about 60 percent
of available calories. But even at present low consumption levels El Salvador does not produce
enough of these basic commodities to feed its people, and the growth of population is placing
an ever increasing strain on productive capacity.
Net imports of the "basic four" have been made in recent years and will doubtless be
needed in the future also. Although some former cotton lands in recent years have been returned to the production of grains, the impact on total supplies has been slight in terms of
total needs. Removal of import duties on food products from time to time has resulted in
increased food imports. This has lowered prices and may have temporarily discouraged local
food production by larger farmers, with little effect on small or subsistence farmers.
Wheat flour, wheat, dairy products, and cattle and hogs for slaughter are regularly imported
to supplement local production and meet minimum nutritional requirements. These commodities,
except flour, will continue to be imported in the future. Population growth and the demands arising
from industrial expansion are increasing import needs for these commodities. El Salvador's
_!/ Regional Analysis Division, Economic Research Service. World Food Budget, 1962 and
1966. Supp. No. 1. U. S. Dept. Agr., Oct. 1961.
22
·present flour milling facilities can be expanded to take care of flour needs for some years. Consumption of wheat flour is increasing and the practice of retailing flour in 2-and 5-pound bags
is expected to encourage its use among lower income groups.
Various types of sugar are important in the Salvadoran diet along with miscellaneous fruits
and vegetables grown and consumed in fairly substantial quantities.
Beef, pork, and poultry are consumed in relatively small quantities. It is doubtful if present
domestic production of meat can keep pacewithprospective demands of the increasing population
and greater per capita consumption. Dairy products form a minor part of the diet but consumption
is slowly increasing.
As the local taste is gradually oriented toward vegetable oils and fats Salvadoran production may be able to supply at least average nutritional requirements for fats.
Recently El Salvador began the production and marketing of "Incaparina," a food product
with high nutritional value developed by the Nutrition Institute of Central America and Panama.
The formula for "Incaparina'' is about as follows: 29 percent ground whole corn, 29 percent
ground whole sorghum grain, 38 percent cottonseed flour, 3 percent Torula yeast, 1 percent
calcium carbonate, and 4,500 units of added vitamin A per 100 grams. It has a protein content
of 26.5 percent and is similar in protein quality to milk. This formula can be varied according
to the raw materials available and the dietary habits of the people. "Incaparina" is readily
soluble in water, and a few minutes cooking produces a hot, nutritious drink.
TRADE IN AGRICULTURAL PRODUCTS
The greatest proportion of El Salvador's foreign exchange earnings comes from agricultural
exports. Farm product imports are minor compared with exports but have provided a small,
steady market for U. S. agricultural exports (table 7).
Trends in Agricultural Trade
The extent to which El Salvador depends on coffee as a source of foreign exchange is shown
in table 5. In 1961 coffee accounted for 61 percent by value of all commodities exported, a rather
sharp decline from 82 percent in 1957. The share of coffee in total agricultural exports dropped
from 84 percent in 1957 to 70 percent in 1961.
The decline in earnings from coffee exports can be attributed to falling world prices. The
increasing importance of cotton and its byproducts, sugar and other relatively minor agricultural
exports also accounts for the slight decline of coffee in the agricultural total.
Until 1960 the United States was El Salvador's best coffee market (fig. 6). However in that
year German coffee purchases exceeded those of the United States by $7.7 million. Again in
1961 Germany maintained its lead in the coffee market, but by a smaller margin. Other important
markets were the Netherlands, Sweden, Belgium, and Italy.
Japan has been the best market for El Salvador's cotton since 1955. In 1961 it was followed
by Germany, the United States, and China. U. S. imports from El Salvador consisted entirely
of cotton linters, for which there are no import restrictions.
23
Table 7.--U.S.--El Salvador trade:
Domestic exports and imports for consumption,
1960 and 1961
U.S. exports to El Salvador
;
1960
Mil.
dol.
~
Dairy products
0.3
Lard ............•....•............. :
0.4
Tallow, inedible .•..•.....•.....•.. :
0. 6
Rice .......•...........•....••....• :
Wheat ....•..............•.....•...• :
Wheat flour ...•.....•.......•.....• :
0.3
0. 7
1. 4
Other grains and preparations ..•... :
0.3
Leaf tobacco
0.3
Fruits and preparations ......•..... :
0.3
Vegetables and preparations
0.3
Other agricultural products . . . . . . . . .
0. 9
Total agricultural exports ..•...• :
5.8
Total exports
y
-
42.2
Less than $50,000.
Source: Foreign Agricultural Trade of the United States,
u.
S. Dept. Agr., Econ. Res. Serv. 1960-61.
COFFEE EXPORTS, EL SALVADOR TO U. S_.
AND OTHER COUNTRIES, ·BY QUANTITY AND VALUE
$ MIL.
MIL. BAGS
2.0~--
-------Quantity
Value - - - - - - - - - - f 100
50
0
1957
1958
1959
U. S. DEPARTMENT OF AGRICULTURE
1960
0
1961
NEG. ERS 1932-63 (4) ECONOMIC RESEARCH SERVICE
Figure 6
Other significant agricultural exports are. largely the output of small industries which
process farm products. Among these are animal feeds composed of milling byproducts, oilseed
cake and meal, and molasses; vegetable oils and margarine, and preserved fruits and vegetables.
Fresh fruits and vegetables exported include oranges, plantains, avocadoes, pineapples,
coconuts, potatoes, pulses, onions, tomatoes, garlic, and chili peppers. Exports of these fruits
and vegetables and their preparations have increased significantly since 1957 though they fell
off somewhat in 1961.
In the last 2 years sesame seed exports have dropped rather sharply, Interest in this
crop apparently is waning due to the large quantity of cheaper cottonseed that is available
to the mills, both in El Salvador and in other Central American countries.
Honey exports have not varied greatly since 1957. Approximately 80 percent of total production is exported and Germany is the principal market.
Egg exports have shown a rising trend since 1957; Guatemala is the best market.
Although the major part of El Salvador's two principal agricultural exports was sold in
Europe and Asia, the United States in 1961 remained the best market in terms of total exports
(fig. 7).
25
VALUE Of EL SALVADOR'S FOREIGN TRADE
Principal Commodities and Areas, 1961
Other agricultural 10.0
Fruits & nuts• 1.3 Dairy products 2.4 ~
-.---r--
Pulses & other/1_.....---vegetables• 2.9
Wheat and
wheat flour 3.0
agricultural
10.2
Cotton fiber
and waste 21.3
IMPORTS
CAFTA 15.1
*VEGETABLES & FRUITS INCLUDE FRESH AND PREPARED
(VALUES GIVEN IN MILLIONS OF DOLLARS)
NEG. ERS 1933-63 (4) ECONOMIC RESEARCH SERVICE
U. S. DEPARTMENT OF AGRICULTURE
Figure 7
Agricultural imports make up roughly one-fifth of the country's total imports (table 8).
Among the more important agricultural commodities imported are dairy products, wheat, pulses,
fresh and preserved fruits and vegetables, and live animals. In 1961 agricultural imports were
valued at $20 million out of a total of $109 million for all imports.
The bulk of the dairy imports consists of condensed, evaporated, and dried milk and this
is supplied largely by the Netherlands and Denmark. Price and quality are important factors
in this market.
The United States is the largest supplier of wheat flour and wheat. In 1960 flour imports
declined somewhat and wheat imports increased sharply. This change-over was even more pronounced in 1961 and the trend may be expected to continue. Imported wheat will be needed in
increasing quantities. The share of the United States in this increase will depend upon the price
and quality of U. S. wheat as compared with Canadian wheat. The two modern flour mills now
in operation can be expanded to produce all of the country's flour needs.
Statistics showing live animals as one of the chief agricultural imports are somewhat
misleading, since roughly half of the animals (by value) are re-exported to Guatemala.
In the case of pulses and rice El Salvador is a net importer of both. Imports come from
Honduras, Guatemala, ~icaragua, and the United States. Exports occur when the supplies on hand
exceed available storage space, and go to neighboring countries.
26
Table 8.--El Salvador:
Imports of selected agricultural commodities, 1957-61
:
:
:
1957
Commodity
: Unit :
:
:Quantity:
Value
tv
-'1
Dairy products ............... : --Wheat ........................ : Bu.
Live animals, principally for :
food .•.•.......•............ : --Pulses .......•............... : Cwt.
Other vegetables, fresh &
:
preserved ..••.•..•....•..... : --Fresh & preserved fruits &
:
nuts .•••..................•. : --Crude animal fats, except
:
fish oils ................... : Lb.
Raw tobacco .••..•...•........ : Lb.
Wheat flour .•....•...•..•.... : Cwt.
Animal feed .•.••.•..•••...... : Lb.
Corn .••..•...•..•.....•....•• : Bu.
Meat & meat products ......... : --Vegetable oils ...........•..• : Lb.
Hog lard ......•.......•.....• : Lb.
Rice, milled ...•••.•.....•... : Lb.
:Quantity:
1,000
dol.
Value
:Quantity:
:
1,000
dol.
:
:
:
:
:
1,000
units
1959
:
:
:
:
1,000
units
1958
Value
:
1,000
units
1960
:Quantity:
:
1,000
dol.
:
:
:
Value :Quantity:
:
1,000
units
1961
Value
:
1,000
dol.
1,000
units
1,000
dol.
--149
2,232
378
--112
2,355
265
--56
2,370
142
--351
2,575
829
--982
2,387
2,241
--177
2,215
815
--158
2,539
981
--229
1,822
1,387
--207
2,166
1,118
--279
1,878
1,655
---
817
---
918
---
988
---
1,132
---
1,275
---
1,138
---
1,162
---
1,132
---
1,275
---
1,273
2,569
2,874
457
4,334
216
--866
3,570
1,121
267
813
2,689
265
342
360
176
593
95
1,559
3,382
497
4,300
928
--654
3, 728
2,667
162
881
2,903
266
1,721
377
145
571
255
3,450
3,575
497
7,891
1,357
665
3,028
8,754
306
839
2,752
426
2,445
274
98
377
613
11,645
3,525
482
13,823
786
--2,235
3,371
8,645
966 11,351
862
4,031
2,611
142
636 13,910
1,253
419
--358
4,070
197
414
2,210
4,612
572
945
839
786
760
644
371
355
300
297
---
---
3,756
---
2,930
---
2,98o
---
3,148
---
3,620
Total agricultural
imports ...•.••........•... :
---
---
16,951
---
18,431
18,951
---
20,109
---
19,626
Total, all imports ......••. :
---
---
115,046
---
108,059
-----
99,537
---
122,402
---
108,708
---
:
Other agricultural
commodities .•.•....•.•...... :
:
:
Agricultural imports
as percentage of
total imports .•..........•.. :
Pet.
---
---
15
Pet.
Pet.
---
l7
---
19
Source: Anuario Estadistico Ministerio de Economia. Direccion General de Estadistica y Censos.
Pet.
---
16
Pet.
---
18
Imports in the fruit category consist mostly of citrus and come from the United States,
Guatemala, and Honduras. The value has remained fairly constant since 1957. Fresh vegetable
imports consist mostly of potatoes, onions, and garlic. Guatemala, Honduras, Nicaragua, and
the United States are the major sources of these and canned vegetable preparations.
The biggest component of the animal fat category is industrial tallow and this increased
sharply in 1960 and 1961. On the other hand lard imports show a downward trend, reflecting
an increase in the use of domestically produced and imported vegetable oil and margarine.
Raw tobacco imports show little variation. Honduras supplies most of the tobacco, the
United States the remainder.
Imports of animal feeds apparently include mostly concentrates for mixing with the local
product. Use of concentrates may be expected to continue as better feeding of livestock and
poultry is practiced.
Meat imports consist of cured and canned meats, sausages, etc. and have remained fairly
constant since 1957.
Trade Policies
El Salvador's tariff system is one of the chief means of providing revenue; more than
one-half of the Government's income is derived from import and export duties. In addition,
import duties protect domestic industries and are designed to promote the development of the
country. More favorable rates are accorded to items that will contribute to economic advancement.
The tariff revision of 1959 increased duties to bring in more revenue. At the same time the
uniform Central American tariff nomenclature, an important factor in the simplification of the
tariff structure, was adopted.
El Salvador is a persistent and determined force in the movement toward economic unity
for Central America which is one of the chief objectives of its trade policy. Another is to
diversify its trade in order to lessen its reliance upon the United States as both supplier and
market.
Leading up to economic integration have been El Salvador's trade agreements with four
of the other Central American countries. That with Honduras has been in effect longest and provides free trade for all items except coffee, raw hides, and certain manufactured products.
The agreements with the other three countries provide for free trade for an extensive list of
items. The reciprocal trade agreement between El Salvador and the United States, in effect since
1937, has been partially terminated at El Salvador's request.
Although quantitative import restrictions are rare, sugar, except for specialty types,
cannot be imported without permission of the Sugar Defense Commission. Certain other items
may be prohibited entry when domestic supplies are considered ample to meet estimated
requirements.
EFFECT OF ECONOMIC INTEGRATION
An economic union of Central American states has been the objective of these countries
for more than a decade, and in that time a host of treaties, agreements, and protocols have been
signed and ratified. These various agreements have called for free trade among the countries
28
and for the establishment and expansion of industries which
market on a preferential basis.
The most recent step in the establishment of the Central
(CAFTA) was the signing in December 1960 of the General Treaty of Central
Integration. This agreement broadens the scope of earlier treaties and sets
of financing integration. It provides for the establishment of a common market
parties within 5 years after the treaty becomes effective. The treaty is in
. the countries: El Salvador, Guatemala, Honduras, and Nicaragua. Costa Rica has
expected to ratify the General Treaty, thereby becoming an active member of CAFTA
El Salvador has been one of the chief forces in promoting the economic unity of Central
America and continues its efforts toward industrial expansion with the aim of marketing its
products in neighboring countries. Although industrial expansion will provide addittonal employment opportunities, the present growth rate of the population is outstripping the rate at which
industry can absorb the labor supply. Industrial progress has not improved to any great extent
the plight of the common man, and this continues to be a source of social unrest.
Trade among members of the CentralAmericancommonmarket is gaining monentum under
the terms of the General Treaty. In 1957 total trade among the republics (including Costa Rica,
which was not then a member) was $34.1 million but by 1961 it had reached $73.4 million. Guatemala and Honduras are much more active trading partners of El Salvador than Nicaragua and
Costa Rica. Honduras and El Salvador have a long history of free trade resulting from their trade
agreement of 1918. The bilateral trade agreement between El Salvador and Guatemala was
ratified early in 1952.
The chief imports from Honduras are live animals--many of which are re-exported--corn,
fresh, dry, and preserved vegetables, tobacco, lumber, cement and other construction materials,
and clothing. Exports to Honduras consist mainly of rice, cereal preparations, fresh and preserved
fruits and vegetables, sugar, margarine and vegetable oils, leather, textiles, clothing, and
footwear.
Imports from Guatemala consist of live animals, grain sorghum, fresh and preserved
fruits and vegetables, animal feed, alcoholic beverages, paint and varnish, textiles, rubber manufactures, pharmaceuticals, cosmetics, and other manufactured articles. Exports to Guatemala
include live animals, eggs, fresh and preserved fruits and vegetables, animal feed, margarine
and vegetable oils, textiles, clothing, and footwear.
The most significant items imported from Nicaragua are live animals, rice, and corn.
Manufactured articles make up the greatest sl1are of El Salvador's exports to that country.
Among these are margarine, cosmetics, textiles, clothing, footwear, and r
~ures.
Fresh and preserved fruits and vegetables and sugar preparations are also exportedo
Fats and oils figure prominently in both import and export trade with Costa Rica. In addition El Salvador imports leather articles and some clothing from Costa Rica and exports textiles,
footwear, and metal manufactures.
Trade with the southern two countries, Nicaragua and Costa Rica, may be expected to pick
up with the improvement and extension of the highway systems of those countries. With its
relatively good transportation facilities, ample labor supply, and abundant hydroelectric power
El Salvador stands a good chance of becoming the center for many of the Central American
integration industries.
29
REFERENCES
Salvador. American Republics Series No. 10. Pan American
Union, Washington, D. C. 1960.
Preliminary Survey of Conservation Possibilities in El Salvador.
Institute of Inter-American Affairs, Division of Health and
Sanitation. El Salvador, Central America. 1946.
Investment in Central America. U. S. Department of Commerce,
Bureau of Foreign Commerce, Washington, D. C. December 1956.
Compendia del Segundo Censo Nacional del Cafe. Direccion General
de Estadistica y Censos. June 1961.
Long Range Plans for Fruit and Vegetable Marketingby Point Four
in El Salvador. James F. Miles, Agency for International Development. April 1961. (mimeo.).
Coffee in El Salvador - Effect of Labor Input and Other Factors,
and Production Trends. Joint Report ofthe Economic Commission·
for Latin America and the United Nations Food and Agriculture
Organization. May 15, 1957.
Agriculture in Point Four Countries Part I - IYiiddle America.
Department of State, Office oflntelligence Research. August 1952.
U. S. Foreign Service. Numerous unclassified despatches from the
Embassy in El Salvador. 1950-1962.
30